It’s budget time again, people! And that can only mean one thing – it’s question time for our man Kenny.
Ahead of next week’s 2016 budget, we spoke to the man himself to find out what predictions My Accountant Friend are making, and how they see rumoured changes having an effect on small businesses, freelancers and independent contractors in the UK.
Kenny – we spoke to you a couple of months ago about the coming budget and entrepreneur’s relief. Do you think that’s still the pressing issue for small business people in terms of this budget?
We are expecting the ER (entrepreneur’s relief) changes to be confirmed as originally expected, regarding a new two year rule. What we are hoping for is clarification on what the government views as the ‘continuation of a trade’, and whether an employed role would be counted or not. Unfortunately, HMRC commonly leave this very vague in that it could be argued either way.
There are strong rumours emerging that George Osbourne wants to ‘cut income tax for middle Britain’, raising the threshold for the 40% income tax rate to £50,000. How is that likely to effect your average freelancer or independent contractor? Is it something you’re concerned about?
This would have a significant impact on the amount of dividends allowed in the basic rate tax band, so would be good news. But I wouldn’t be holding my breath on such a significant increase for the 2016/17 tax year. If I were a betting man, I’d say it might possibly be phased in over the next, ooooh… X amount of years.
Thanks for your specificity.
You’re more than welcome.
What, in an ideal world, would MAF most like to see for its customers in next week’s budget? What would your wish list include?
Doing away with the planned changes to dividend tax in the basic rate band would be good, although we would welcome the removal of the tax credits on these dividends. The increase of the basic rate threshold would also be pleasing.
And do you think you’ll realistically get anything ticked off your wish list?
Nope.
Ah well… we live in hope. Any recommendations for clients (or non-clients) who are concerned about how the 2016 budget might effect them?
Well, we’re always open for a chat. Drop us a line to get in touch. On March 16, the day of the 2016 budget, we’ll be listening keenly and working out how the changes will affect our clients. Check back on the day to see our response, which we’ll be posting here on our blog.
